Hays' UK business buoyed by public sector

In contrast to Capgemini’s upbeat trading statement (see below), recruitment firm Hays gave a muted picture of the market this morning. CEO Alistair Cox (for whom Xansa, which he used to head, must now seem like a distant dream) reported “strong” performance in his UK public sector business “offsetting weakness in the UK private sector.” Permanent placement demand is on the wane, though contractor placements are stable except in Construction & Property.

We have always viewed the recruitment sector as a bellwether for the wider UK economy in general and the IT sector in particular, and Cox’s comments are far more in line with what we believe is the reality. The remedial action is surely ‘deja vue’ for all those that have been through this before, i.e. “In the last two quarters we have continued to take action to reduce our cost base in those markets already affected by the wider economic issues and going forward we will continue to keep a tight control on costs, focus on cash generation and react rapidly to changing market conditions.”. Sage advice.